Telangana High Court
M/S.Sant Damaji Sahakari Sakhar ... vs M/S. Ajaykumar Sushilkumar on 16 April, 2025
*THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
+ CIVIL REVISION PETITION NO.241 OF 2025
% 16--04--2025
# 1.M/s.Sant Damaji Sahakari Sakhar Kharkana Ltd.,
Rep. by its Chairman, Mangalwedha,
Solapur District 413 305, Maharashtra and others.
... Petitioners
vs.
$ 1. M/s. Ajaykumar Sushilkumar,
Rep. by its Authrised Signatory,
Mr.Aman Agarwal, S/o. Ramavatar Agarwal,
Having its Registered Office at 15-2-163,
Maharajgunj, Hyderabad.
... Respondent
!Counsel for the Petitioners: Mr.Damodar Mundra
^Counsel for Respondent: Mr.B.Vamshidhar Reddy
<Gist :
>Head Note :
? Cases referred:
MANU/SC/0068/12
(2013) 13 SCC 1
(2023) 6 SCC 401
2024 SCC OnLine Ker 797
2014 SCC OnLine Bom 512
2/13
MB, J & BRMR, J
CRP.No.241 of 2025
IN THE HIGH COURT FOR THE STATE OF TELANGANA
HYDERABAD
****
CIVIL REVISION PETITION NO.241 OF 2025
Between:
1.M/s.Sant Damaji Sahakari Sakhar Kharkana Ltd.,
Rep. by its Chairman, Mangalwedha,
Solapur District 413 305, Maharashtra and others.
... Petitioners
And
1. M/s. Ajaykumar Sushilkumar,
Rep. by its Authrised Signatory,
Mr.Aman Agarwal, S/o. Ramavatar Agarwal,
Having its Registered Office at 15-2-163,
Maharajgunj, Hyderabad.
... Respondent
JUDGMENT PRONOUNCED ON: 16.04.2025
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : No
2. Whether the copies of judgment may be
Marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
_____________________
B.R.MADHUSUDHAN RAO,J
3/13
MB, J & BRMR, J
CRP.No.241 of 2025
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
CIVIL REVISION PETITION NO.241 OF 2025
ORDER:(per Hon'ble Justice B.R.Madhusudhan Rao) This Civil Revision Petition is filed aggrieved by the order passed by the Additional Special Court in the cadre of District Judge for Trial and Disposal of Commercial Disputes at Hyderabad in I.A.No.157 of 2024 in COS.No.18 of 2024, dated 12.11.2024, wherein the application filed by the petitioner under Order VII Rule 11 of Civil Procedure Code (CPC) was dismissed.
2.1 The contentions of the petitioners in I.A.No.157 of 2024 (under Order VII Rule 11 of CPC) is that respondent No.1/plaintiff filed suit for recovery of money and damages against the petitioners for a sum of Rs.2,32,88,194/- out of which Rs.1,12,13,218/- is the principal amount against the supply of material to the petitioner No.1/society. Petitioner No.1 is a Co-operative Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 (hereinafter called as 'the Act, 1960') vide registration No.SUR/MDA/TRG(A)-15/S/1/1989 dated 26.04.1989 before the State of Maharashtra. The petitioner No.1 is running a sugar factory and for the purpose of the business used to purchase gunny bags from the respondent No.1. Earlier respondent No.1 used to supply gunny bags with good quality with weightage of 160 4/13 MB, J & BRMR, J CRP.No.241 of 2025 grams however the supply that made by the respondent No.1 was of inferior quality which weighed around 148 grams due to which disputes arose. The petitioners have raised contentions that plaint has to be rejected on the grounds of (i) non-compliance with the mandatory provisions of Section 12(A) of the Commercial Court Act, (ii) barred by limitation and (iii) jurisdiction of the Civil Court is barred under Section 91 read with Section 163 of the Act, 1960.
2.2. The plaint is barred under Article 24 of the Limitation Act, 1963 (hereinafter referred to as 'the Act, 1963') and it is sated in the plaint that the last payment made by the petitioners is on 14.12.2018, the suit is hopelessly barred. Respondent No.1 has earlier filed COS.No.44 of 2021 which was rejected by the Commercial Court vide order dated 24.10.2023 as the respondent No.1 failed to comply issuance of notice under Section 164 of the Act, 1960. Respondent No.1 is a member of the society for making transaction of goods and made compliance for becoming "C" class member of the society. The dispute is covered under the business of society under Sections 91 and 163 of the Act, 1960. The business of the societies shall be referred to the Co-operative Court and the Civil Court has no jurisdiction to try the same and prayed to reject the plaint as the suit has been initiated without complying with the pre- institution mediation as it is barred by limitation and lack of jurisdiction.
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MB, J & BRMR, J CRP.No.241 of 2025 3.1 Respondent No.1 has filed counter and contended that earlier they have filed suit for recovery of money and damages vide COS.No.44 of 2021 before the Commercial Court and the petitioners have filed I.A.No.389 of 2022 under Order VII Rule 11 of CPC seeking rejection of plaint as the respondent failed to give mandatory notice under Section 164 of the Act, 1960, the suit came to be rejected vide order dated 24.10.2023. The suit in COS No.44 of 2021 was rejected on technical and legal grounds. Respondent No.1 has filed an application seeking permission of the Court to waive the pre-institution mediation and settlement as mandated in Section 12(A) of the Commercial Courts Act, 2015 (hereinafter referred to as 'the Act, 2015') and the Court was pleased to allow the application foregoing the pre-limitation mediation between the parties on the ground of urgency.
3.2 Respondent No.1 has filed application under Order XXXVIII Rule 5 of CPC seeking to furnish security in respect of the suit claim in COS.No.18 of 2024. Respondent No.1 has lawfully obtained the leave of the Court. It is settled law that the Court only needs to look at the plaint and the documents filed along with the same and cannot look at the defence of the petitioners. The Apex Court in suo-motu Writ Petition (Civil) No.3 of 2020 was pleased to extend the limitation period from 20.03.2020 to 08.03.2021 due to Covid-19 pandemic despite the last payment made on 14.12.2018. The suit filed by respondent No.1 in COS.No.44 of 2021 was rejected vide order dated 24.10.2023 and 6/13 MB, J & BRMR, J CRP.No.241 of 2025 therefore, the period from 2021 till the issuance of notice under Section 164 of the Act is excluded. The suit is protected by Sections 14 and (15)(2) of the Act, 1963. The limitation is a mixed question of law and fact, therefore the same cannot be determined at this juncture. Respondent No.1 never became "C" class member of the society or has signed any documents. Dispute is not covered under Sections 91 and 163 of the Act, 1960.
4. The Trial Court after going through the record has dismissed the application filed by the petitioners under Order VII Rule 11 (I.A.No.157 of 2024) on 12.11.2024 holding that Sections 91 and 163 of the Act, 1960 are not applicable and further held that limitation is a mixed question of fact and law and the same has to be decided in a full fledged trial.
5. Learned counsel for the petitioners submits that suit is hit by Section 91(c) read with Sections 45 and 163(1)(b) of the Act, 1960. Respondent No.1 surrendered themselves to the jurisdiction of the Act, 1960, by not preferring any appeal against the order passed in COS.No.44 of 2021. On reading of Section 164 of the Act, 1960, notice shall be addressed to the Registrar, shall state the cause of action, details of the plaintiffs', relief of the plaintiffs. In the event the Court comes to a conclusion that the respondent No.1 does not fall under Section 91(c) R/W Sections 45, 163(1)(b) of the Act, 1960, even then the respondent No.1 has otherwise failed to comply with the correct format 7/13 MB, J & BRMR, J CRP.No.241 of 2025 of the notice under Section 164 of the Act, 1960. Learned counsel to substantiate her contention has relied on the decisions in the case of
(i). Margret Almeida and Ors. vs. The Bombay Catholic Co-operative Housing Society Ltd. and Ors 1, (ii). Yakub Abdul Razak Memon vs. State of Maharashtra 2.
6. Learned counsel for respondent No.1 submits that the petitioners have challenged the jurisdiction of a Civil Court as per the Act, 1960. The petitioners have restricted their grounds in the CRP that Sections 91 and 163 of the Act, 1960 will be applicable to the facts and circumstances of the commercial suit. Respondent No.1 has filed the civil suit for recovery of money for the amounts not paid for the goods supplied i.e., gunny bags. Section 21 of the Commercial Court Act, 2015 has a notwithstanding provision. The suit is pending before the Commercial Court at Hyderabad which falls within the definition of Section 2(1)(c)(xviii) of the Act, 2015 i.e., agreements for sale of goods or provision of services as the value of the suit is above one crore. The Commercial Court has jurisdiction to try the suit but not the co- operative Tribunal or any other Court on account of notwithstanding provision mentioned in Section 21 of the Act, 2015 and on account of Section 6. Section 45 of the Act, 1960 deals with disputes relating to loans and borrowings and does not cover other disputes much less a dispute with respect to recovery of money for goods supplied between 1 Manu/SC/0068/12 2 (2013) 13 SCC 1 8/13 MB, J & BRMR, J CRP.No.241 of 2025 the society and non member. Counsel relied on the decisions reported in (i). Gujarat State Civil Supplies Corporation Limited vs. Mahakali Foods Private Limited (Unit 2) and Another 3, (ii). Alexander Luke vs. Aditya Birla Money Ltd., 4 and (iii). Usha Sunder Premises Co-operative Society Ltd. vs. Nilang Desai and Others. 5
7. Learned counsels on record have filed their respective written submissions supporting their contentions.
8. We have heard learned counsel appearing for the parties and have gone through the material on record, the only question falls for our consideration is whether the order passed by the trial Court suffers from any perversity or illegality.
9. Firstly let us see the definition of member in the Act, 1960. Section 2(19)(a) of the Act, 1960 says member means a person joining registration of a Co-operative Society which is subsequently registered, or a person duly admitted to membership of a society after registration and includes a nominal, associate or sympathizer member. Sub-clause
(b) deals with associate member who holds a share of society with others, sub- clause (c) deals with nominal member who is admitted to membership as such after registration in accordance with the by-laws, sub-section (d) deals with sympathizer member who sympathises with 3 (2023) 6 SCC 401 4 2024 SCC OnLine Ker 797 5 2014 SCC OnLine Bom 512 9/13 MB, J & BRMR, J CRP.No.241 of 2025 the aims and objects of the society and who is admitted by the society as such member.
10. It is to be noted here that respondent No.1 has earlier filed COS.No.44 of 2021 against the petitioners for recovery of Rs.1,90,41,694/- together with interest at the rate of 18% per annum in respect of the material supplied. The petitioners after their appearance filed an application in IA No.389 of 2022 under Order VII Rule 11 read with Section 151 of CPC to reject the plaint contending that the disputes between the members of the society is covered under Section 91 of the Act, 1960 and the dispute is required to be referred to Co-operative Court at Solapur and the suit in the present form is not maintainable in view of Section 163 of the Act 1960, if there is any disputes with regard to the business of the society the same needs to be intimated to the Registrar of the Societies in view of Section 164 of Act, 1960. Respondent No.1 filed his counter in IA.No.389 of 2022 and contested the same. The Commercial Court vide order dated 04.10.2023 has rejected the plaint in COS.No.44 of 2021 under Order VII Rule 11(d) of CPC holding that notice under Section 164 of the Act, 1960 is mandatory in nature.
11.1 Respondent No.1 after rejection of COS.No.44 of 2021 in IA No.389 of 2022 vide order dated 04.10.2023 got issued a legal notice on 11.01.2024 to the petitioners by marking a copy to the Registrar, Maharashtra State Co-operative Sugar Factories Federation Limited, 10/13 MB, J & BRMR, J CRP.No.241 of 2025 Maharashtra and apart from others, thereafter filed COS.No.18 of 2024 for recovery of amount against the petitioners and others, for an amount of Rs.2,32,88,194/- together with interest at the rate of 18% per annum from the date of filing the suit till the date of realization. It is mentioned in the plaint (COS.No.18 of 2024) that in order to rule out any ambiguity, again issued a legal notice dated 11.01.2024 to defendants herein and others concerned Government officials in consonance with the requirement under Section 164 of the Act, 1960 calling upon the defendant No.1 to make payment of Rs.2,29,56,405/- for the goods supplied by the plaintiff therein within a period of 15 days of receipt of the notice and copy of the same is also served on the other defendants. Petitioner No.1 herein/defendant No.1 in the suit gave a reply on 26.02.2024 raising false and baseless allegations. 11.2. It is further mentioned in the plaint that contract between the parties comes under commercial disputes under Section 2(1)(c)(i), Section 2(1)(c)(xviii) of the Act, 2015 and the suit filed by them is within the period of limitation, suit is protected under Sections 14, 15(2) of the Act, 1963.
12. Section 45 of the Act, 1960 deals with restrictions on other transactions with non-members: the transactions of the society with persons other than members shall be subject to such restrictions underlying if any as may be prescribed. Section 91 of the Act, 1960 deals with disputes, sub-clause (1)(c) says that a person other than a 11/13 MB, J & BRMR, J CRP.No.241 of 2025 member of the society, with whom the society has any transactions in respects of which any restrictions or regulations have been imposed, made or prescribed under Sections 43, 44 or 45, and any person claiming through such person. Section 163 deals with bar of jurisdiction of Courts, sub-clause(1)(b) says any dispute required to be referred to the co-operative society for decision.
13. Section 2 of the Act, 2015 deals with definitions, relevant definition is Section 2(1)(c)(xviii) deals with agreements for sale of goods or provision of services. Section 6 of the Act, 2015 deals with the jurisdiction of Commercial Courts which has jurisdiction to try all suits and applications relating to commercial disputes of a specified value arising out of the entire territory of the state over which it has been vested territorial jurisdiction. Section 21 of the Act, 2015 deals with overriding effect.
14. Respondent No.1 has filed COS.No.18 of 2024 on 18.03.2024 for recovery of Rs.2,32,88,194/- towards supplying of material to the petitioners' society along with future interest at the rate of 18% per annum. The point raised by the petitioner counsel is that suit is barred by limitation and the jurisdiction of Civil Court is barred under Section 91 read with Section 163 of the Act, 1960 and further submits that as per the pleadings in the plaint last payment is made on 14.12.2018. It is averred in the plaint that the petitioners have made their last payment on 14.12.2018. It is further averred in the plaint that 12/13 MB, J & BRMR, J CRP.No.241 of 2025 COS.No.44 of 2021 is filed in the year 2021 and the same was rejected on 24.10.2023 for non-compliance of notice under Section 164 of the Act, 1960. Respondent No.1 has got issued legal notice on 11.01.2024 in compliance with Section 164 of the Act, 1960 and thereafter suit in COS.No.18 of 2024 is filed on 18.03.2024 and they are protected under Sections 14 and 15 (2) of the Act, 1963.
15. The Supreme Court in suo-motu Writ Petition No. 3 of 2020 extended the limitation period from 20.03.2020 to 08.03.2021 due to Covid-19 pandemic. In view of the same COS.No.44 of 2021 is filed by the respondent No.1. From 08.03.2021 till issuance of notice dated 11.01.2024 is protected under Sections 14 and 15(2) of the Act, 1963. As rightly observed by the trial Court that the limitation is a mixed question of fact and law and the same has to be adjudicated in a full trial, it cannot be decided in the application filed under Order VII Rule 11 of CPC.
16.1. In Margaret Almeida case1 (supra) the Supreme Court observed at paragraph No.22 which reads as under:
"22. Section 91 also stipulates that the disputes which are mandatorily required to referred to the Co-operative Court for adjudication must also be disputes arising between the parties to the dispute who should belong to one or the other categories specified under clauses (a) to (e) to Sub-section (1), hereinafter referred to as 'enumerated persons', for the sake of convenience. It can be seen from the scheme of Section 91, to confer exclusive jurisdiction on the Co-operative Court, the dispute must satisfy two requirements. It was held so in Marine Times Publications (P) Ltd. v. Shriram Transport and Finance Company Ltd. MANU/SC/0161/1991 : (1991) 1 SCC 469 at para 11:13/13
MB, J & BRMR, J CRP.No.241 of 2025
11. Before a dispute can be referred to a Cooperative Court under the provisions of Section 91(1) of the said Act it is not only essential that the dispute should be of a kind described in Sub-section (1) of Section 91 but it is also essential that the parties to the said dispute must belong to any of the categories specified in Clauses (a) to (e) of Sub-section (1) of the said section.
Both the subject matter as well as the parties to the dispute must be those specified under the section. In other words, if either of the above mentioned two requirements is not satisfied then the dispute cannot be adjudicated by the Co- operative Court. If one of the parties to the dispute is not an enumerated person, the question whether the subject-matter of the dispute is one which falls exclusively within the jurisdiction of the Co-operative Court need not be examined. Similarly, if it is found in a given case that the subject-matter of the dispute is not covered by Section 91, an enquiry into the question whether the parties to the dispute fall under any of the categories enumerated under Section 91 would become irrelevant."
16.2. It is important to note here that the Supreme Court in Margaret Almeida (supra) has also discussed about Section 91(1)(c) of the Act, 1960 at Paragraph No.29 which reads as under:
"29. Therefore, where Section 91(1)(c) speaks of persons other than the members of the society, it is actually referring to persons other than the members of the society who have deposited money with the society or who have either lent or borrowed money from the society in accordance with the provisions of Sections 43 and 44 and subject to the conditions and limitations if any prescribed with reference to such lending to or borrowing from the society."
17. In Yakub Abdul Razak Memon2 (supra) the Supreme Court has held that the principal that the later Act would prevail over the earlier Act has consistently been held to be subject to exception that a general provision does not derogate from a special one.
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MB, J & BRMR, J CRP.No.241 of 2025
18. In Gujarat State Civil Supplies Corporation Limited3 (supra) the Supreme Court Held that the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 being an enactment later to that of the Arbitration and Conciliation Act, 1996, shall have an overriding effect over the provisions of the Arbitration Act, 1996, similar view is taken by the Division Bench of the Kerala High Court in Alexander Luke4 supra.
19. In Usha Sunder Premises Co-operative Society Ltd.5 case (supra), the issue fell for consideration before the Bombay High Court is with regard to the bar of inherent jurisdiction of the Court under Section 91 of the Act, 1960, wherein it is held that the disputes relates to the management and business of the plaintiff's society and is in between the society, its members and the persons other than its proposed members be covered under Section 91, it must be adjudicated in the Co-operative Tribunal is incorrect. The Civil Courts jurisdiction is not seem to be barred.
20. The Maharashtra Co-operative Societies Act is of the year 1960, The Commercial Courts Act is of the year 2015 which has an overriding effect under Section 21 of the Act, 2015, further more respondent No.1 is not a member of the Society and it cannot be said that Commercial Court has no jurisdiction to try the suit. The petitioners' failed to show before the trial Court what are the restrictions which have been prescribed under the provisions of the Act, 1960 so that the Commercial 15/13 MB, J & BRMR, J CRP.No.241 of 2025 Court has no jurisdiction to try the case. The filing of the suit by the respondent in COS.No.18 of 2024 does not fall in any of the provisions under Section 91(1)(c) R/W Section 45 and Section 163 (1) (b) of the Act, 1960.
21. The trial Court has properly appreciated the facts of the case and rightly dismissed the application field by the petitioners under Order VII Rule 11(d) of CPC, 1908 and rightly observed that the limitation is a mixed question of fact and law, which has to be decided in full fledged trial. We are of the considered view that the trail Court has rightly observed in its order that the petitioners have not made out any case for rejection of plaint in COS.No.18 of 2024.
22. We are not inclined to interfere with the orders of the trial Court and we do not find any perversity or illegality in the impugned order.
23. CRP.No.241 of 2025 is dismissed. There shall be no order as to costs.
Pending miscellaneous applications, if any, shall stand closed.
__________________________________ MOUSHUMI BHATTACHARYA, J ______________________________ B.R.MADHUSUDHAN RAO, J 16.04.2025 Dua